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Delivering growth organically and through targeted acquisitions - - PowerPoint PPT Presentation

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Delivering growth organically and through targeted acquisitions Results for the half year to 30

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SLIDE 1

Delivering growth organically and through targeted acquisitions

Results for the half year to 30 June 2016

30 August 2016

  • Charles Taylor plc Investor Presentation – 2016 Half Year Results

30 August 2016

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SLIDE 2

We have a robust investment case Strong fundamentals

  • Well established in

global insurance market

  • Long-standing, loyal

client relationships

  • Highly skilled,

technically excellent staff

Consistently profitable

  • Diversified, resilient

business

  • Reliable revenue and

profit streams

  • Solid cashflows
  • Well supported

dividend

Positive prospects

  • Driving forward four

key growth themes:

  • Grow mutual-related

businesses

  • Expand Adjusting Services
  • Build on existing ISS skills

and services

  • Consolidate life insurers
  • Healthy acquisition, JV

and business investment pipeline

2 Charles Taylor plc Investor Presentation – 2016 Half Year Results 30 August 2016

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SLIDE 3

Owned Insurers Key business lines Clients Key business lines

Management

  • Provides end-to-end

management of insurance companies

  • Delivers a complete
  • utsourced management

service covering all the companies’ operations

SCALA

Adjusting

  • Provides loss adjusting

services across four main sectors: energy, marine, aviation, property and casualty

  • Focuses on larger and

more complex losses

Energy Aviation Property, Casualty and Special Risks Marine

Insurance Support

  • Provides stand-alone

professional services which enable our clients to select the specific services they require

Insurance Technology Life and P&C BPO/ TPA Risk Mitigation & Transfer Turnkey Managing Agency Investment Management

Owned Insurance Companies

  • Owns and consolidates

life insurance businesses, creating value through targeted acquisitions and

  • perational efficiency

LCL International Life Assurance Company LCL Life & Pensions

Charles Taylor provides a full range of Professional Services to global insurance markets

Claims Management

  • 3

LCL Assurance Medical assistance and travel claims management

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SLIDE 4

We have a clear business strategy

4

Professional Services

Optimise business

  • perations
  • Strengthen the

Group’s core capabilities and global businesses services to underpin growth Deliver growth in the core professional services businesses

  • Achieve leadership

positions in all the Group’s businesses and develop new, closely related, insurance services Explore medium-term strategic options

  • Develop new

professional services through acquisitions, joint ventures and business investments

Owned Insurance Companies

Seek targeted acquisition

  • pportunities in the

international life insurance sector

Charles Taylor plc Investor Presentation – 2016 Half Year Results 30 August 2016

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SLIDE 5

Charles Taylor’s pace of growth has accelerated over the last four years

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SLIDE 6

Fadata is focused on developing its business in Western and emerging markets

6 Charles Taylor plc Investor Presentation - 2015 Results 10 March 2016

  • €5.1m investment in Fadata, a specialist provider of software solutions to the

global insurance industry completed Dec 2015

  • Strengthened management team:
  • New CEO with 20 years’ FinTech experience

appointed April 2016

  • New Chief Financial Officer and UK Sales Director

appointed in H1

  • Recognised by major industry awards:
  • Leader in Gartner’s Magic Quadrant - Life Insurance

Policy Admin Systems

  • XCelent Depth of Service Award - EMEA policy

administration solutions

  • H1 performance impacted by the management focus on

sales process and senior appointments

  • Finalised a major software

licencing and master services agreement with Fadata

  • Appointed by Fadata as

preferred global implementation and marketing partner

  • Working with Fadata on the

first implementation of INSIS for a Charles Taylor client

developments developments

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SLIDE 7

7 Charles Taylor plc Investor Presentation – 2016 Half Year Results 30 August 2016

Our acquisition of CEGA Group brings significant strategic and financial benefits

CEGA is one of the world’s leading providers of medical and security assistance, travel risk and claims management services

Explore medium-term strategic options

  • Develop new

professional services through acquisitions, joint ventures and business investments Acquisition fully aligned with our stated strategy

Travel Claims Management Medical assistance

Insurance Technology Life and P&C BPO/ TPA Risk Mitigation & Transfer Managing Agency Investment Management Claims Management

Increases size and scope of ISS business

ISS provides stand-alone professional services which enable our clients to select the specific services they require

Strengthens CEGA and supports its growth Sizeable, positive impact

  • n Charles Taylor
  • Benefit of Charles Taylor’s

financial strength

  • Continued investment in

technology and innovation supported by CT InsureTech

  • Continuity of management,

client service and CEGA’s brand

  • Utilisation by CT businesses

that currently use other assistance providers

  • Introductions to CT’s clients
  • Access to CT’s international

network of offices

  • Increased negotiating

power with 3rd parties

  • Maximum total

consideration £29.8m

  • Revenue (20151) £31m
  • EBITDA (2015, adj1) £3.3m

+7.5% growth in 2 years

  • PBT (2015, adjusted1)

£2.7m; 19% of CT’s 2015 adjusted PBT

  • Will be consolidated for 5

months in CT 2016 accounts

  • Expected to be modestly

earnings enhancing for CT in 2016…

  • …and to contribute

meaningfully to revenue and profits from 2017

  • 1. Continuing businesses only. Adjusted EBITDA and PBT also exclude non-recurring operating cost
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SLIDE 8

Charles Taylor Group results H1 2015 H1 2016 Change % Revenue (£m) 69.2 74.0 7.0 Adjusted PBT (£m) 5.8 6.0 4.2 Statutory PBT (£m) 5.2 5.3 1.9 Adjusted earnings (£m) 5.0 5.7 12.6 Adjusted EPS (p) 7.75 8.55 10.3 Statutory EPS (p) 7.56 7.19 (4.9) Dividend per share (p) 3.00 3.15 5

1. Restated to show continuing business 2. Restated to reflect full year impact of the Rights Issue

We delivered strong profit and revenue growth in H1 2016

8 Charles Taylor plc Investor Presentation – 2016 Half Year Results 30 August 2016

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SLIDE 9

Results H1 2016 (£m) Revenue Operating segment profit

Services H1 2015 H1 2016 Increase % H1 2015 H1 2016 Increase % Management 23.6 25.4 7.5 3.1 3.3 4.6 Adjusting 29.4 31.7 7.8 0.8 1.6 99.3 Insurance Support 15.3 16.0 4.6 2.6 2.4 (8.3) Realised FX (losses)/gains

  • 0.1

(0.3) n/a Professional Services 1 68.3 73.1 7.0 6.6 6.9 5.1 Insurance Companies 2.5 2.3 (7.3) 0.1 0.1 (51.6) Eliminations (1.6) (1.4) n/a

  • Group 1

69.2 74.0 7.0 6.7 7.0 4.1

1. Small rounding differences arise in the total amounts above

The core professional services performed well and the life businesses performed steadily

9 Charles Taylor plc Investor Presentation – 2016 Half Year Results 30 August 2016

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SLIDE 10

Net cash/ (debt )(£m)

Net cash/(debt) Annual average net cash/debt

At 30 Jun 2015 1.8 18.2m At 31 Dec 2015 (9.9) 5.2m At 30 Jun 2016 3.3 (1.2) Adjusting Services

WIP (months) Debtors (months) Working capital (months)

At 30 Jun 2015 4.9 4.5 9.4 At 31 Dec 2015 4.9 5.2 10.1 At 30 Jun 2016 4.5 5.7 10.2 Pension deficit (£m)

Total Net of deferred tax

At 30 Jun 2015 36.2 29.0 At 31 Dec 2015 39.6 32.1 At 30 Jun 2016 56.3 46.1

We are managing the Group’s cash while investing for growth

  • Net cash includes:

balance of rights issue proceeds (pre-CEGA acquisition) advance payment of The Standard Club fees receipt of funds from the sale/transfer of the non- life businesses

  • Pension deficit rose in common with most

businesses with DB schemes

  • Increase driven by a 1.0% drop in discount rates

since the year end, caused by the fall in corporate bond yields following the UK EU vote

  • The pensions schemes are closed to new entrants
  • Adjusting working capital flat in H1
  • We are focused on managing down Adjusting

Services working capital 10 Charles Taylor plc Investor Presentation – 2016 Half Year Results 30 August 2016

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SLIDE 11

Grow Mutual- related businesses

Key growth themes

Expand Adjusting Services Build on existing ISS skills & services Consolidate life insurers

We are delivering on our key growth themes6

Geared for recovery New services gaining traction Building record of acquisitions and releases Comment Benefits flowing through Delivered H1 2016

  • Enabled The Standard Club to

grow to 4th largest P&I club

  • Supported SWRM to exceed

first year expectations

  • Helped SafeShore WC

programme to grow

  • Strengthened office network
  • Invested in teams
  • Improved operational

capabilities

Deliver increased revenues by growing alongside the mutual insurers managed by Charles Taylor, offering new products and services, and winning new contracts Grow adjusting revenues by expanding into new locations and expanding the services offered from each office Generate new revenues by extending

  • ur professional services capabilities for

global insurance markets Secure capital releases by acquiring and consolidating life insurance businesses 11 Charles Taylor plc Investor Presentation – 2016 Half Year Results 30 August 2016

  • Acquired CEGA
  • Reached licencing agreement

with Fadata

  • Won InsureTech business
  • Implementing INSIS
  • Won new TRAX business
  • Launched broker incubator
  • Extended TPA services
  • Consolidating life company

acquisitions

  • Seeking further acquisition
  • pportunities
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SLIDE 12

We have had a positive start to H2 2016, all business lines performing in line with expectations

  • Our people are highly regarded, technically excellent and committed to service

excellence

  • Our people are supported by strong leadership across all business lines
  • Our extensive office network ensures we are located close to our clients
  • We are successfully executing our business strategy for growth:

– Our Management and Insurance Support businesses are growing – Our Adjusting business is geared for growth – Our Insurance Support Services business is capitalise growth initiatives

  • Our Owned Insurance Companies business is acquiring life insurers
  • We are executing a targeted strategy to source attractive opportunities for

acquisitions, joint ventures and business investments across all business lines

12

Charles Taylor is a &"

Charles Taylor plc Investor Presentation – 2016 Half Year Results 30 August 2016

We are very positive about the future prospects of Charles Taylor. We believe the potential for growth in the professional services delivered by the Group to global insurance markets is great.

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SLIDE 13

Appendices

13 Charles Taylor plc Investor Presentation – 2016 Half Year Results 30 August 2016

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SLIDE 14

H1 Results 2015 vs 2016

Six months to 30 June 2016 74.0 7.0 (0.7) (0.2) 6.0 (0.3) 5.7 8.55

Note: Small rounding differences arise in the total amounts above

Six months to 30 June 2015 Revenue (£m) 69.2 Operating segment profit (£m) 6.7 Finance costs/other (£m) (0.7) Non-controlling interests before tax (£m) (0.2) Adjusted profit before tax (£m) 5.8 Tax (£m) (0.7) Adjusted earnings (£m) 5.2 Adjusted earnings per share (p) 7.75

14 Charles Taylor plc Investor Presentation – 2016 Half Year Results 30 August 2016

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SLIDE 15

Segmental results

£m Professional Services Insurers Other Group

Six months to 30 June 2016

Management Services Adjusting Services Insurance Support Services Unallocated Total Owned Insurance Companies Eliminations Total Revenue from external clients

  • Revenue from other operating

segments

  • Total revenue
  • Depreciation and amortisation
  • Other expenses
  • Operating segment profit
  • Finance costs / other
  • Non-controlling interests before tax
  • Profit before tax – adjusted
  • Amortisation of acquired intangible

assets

  • Non-controlling interests before tax
  • Profit before tax - statutory
  • Note: Small rounding differences arise in the total amounts above

15 Charles Taylor plc Investor Presentation – 2016 Half Year Results 30 August 2016

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SLIDE 16

Free cash flow – H1 2016 vs H1 2015

Note: Small rounding differences arise in the total amounts above

£m H1 2015 H1 2016 Operating cash flow before movement in working capital Change in working capital Change in insurance company net assets 7.7 6.9 0.1 8.3 10.2 2.2 Cash flow generated by operations

whereof Professional Services whereof Owned Insurance Companies

Income tax paid Interest paid 14.6 14.7 (0.0) (0.6) (0.5) 20.7 16.4 4.3 (0.1) (0.5) Net cash flow before movement in client funds Net capital expenditure Interest received 13.6 (3.9) 0.0 20.1 (4.7) 0.2 Free cash flow 9.7 15.5

16 Charles Taylor plc Investor Presentation – 2016 Half Year Results 30 August 2016

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SLIDE 17

Segmental balance sheet

17 £m 30 June 2015 30 June 2016 Professional Services Owned Insurance Companies Group Professional Services Owned Insurance Companies Group Management Services

8.0

  • 8.0

2.5

  • 2.5

Adjusting Services

132.2

  • 132.2

179.2

  • 179.2

Insurance Support Services

37.7

  • 37.7

62.5

  • 62.5

Unallocated and eliminations

36.5

  • 36.5

26.3

  • 26.3

Owned Insurance Companies

  • 845.3

845.3

  • 1,133.9

1,133.9

Total assets

' ()'* &)+', ,') &**'+ &'

– Non-current assets

73.1 3.0 76.1 85.0 2.2 87.2

– Current assets

141.3 842.3 983.6 185.7 1,131.6 1,317.3

Total assets

' ()'* &)+', ,', &**'( &')

Current liabilities

(108.4) (788.9) (897.3) (153.5) (1,112.5) (1,266.0)

Deferred consideration

(0.8) (9.7) (10.5) (1.6) (8.1) (9.7)

Net current assets

*' *', ,)'( *'- ' '-

Non-current liabilities

(43.4)

  • (43.4)

(62.1)

  • (62.1)

Deferred consideration

(2.5) (12.5) (15.0) (1.4) (4.5) (5.9)

Total liabilities

.))'/ .('/ .+--'/ .('-/ .&)'/ .&**',/

Net assets

)+'* *' +*') )' (',

  • '(

Non-controlling interests

(1.5) (20.9) (22.4) (2.1) 0.1 (2.0)

Equity attributable to owners

  • f the Company

),'( *'* ,' )' ('( )('(

Charles Taylor plc Investor Presentation – 2016 Half Year Results 30 August 2016

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SLIDE 18

Disclaimer

18

This presentation contains certain forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will or may occur in the future. Actual results may differ from those expressed in such statements, depending on a variety of factors, including demand and pricing,

  • perational problems, general economic conditions, political stability

and economic growth in relevant areas of the world, changes in laws and governmental regulations, exchange rate fluctuations and other changes in business conditions, the actions of competitors and other factors.

Charles Taylor plc Investor Presentation – 2016 Half Year Results 30 August 2016

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SLIDE 19

Delivering growth organically and though targeted acquisitions

Results for the half year to 30 June 2016

30 August 2016

  • Charles Taylor plc Investor Presentation – 2016 Half Year Results

30 August 2016